Asian spot LNG prices fell for a second week as Pacific producers added supply and curbs on Nigerian output were to be lifted by the end of the month, amid thin demand.
Prices for September delivery fell to around $5.60 per million British thermal units (MMBtu), 20 cents below last week's levels, with October trading 5 cents to 10 cents below September, sources said.
Two of four cargoes recently sold by Russia's Sakhalin II plant fetched a price in the high $5/MMBtu-- reflecting end-user demand, one trader source said, citing it as above-market.
Multiple cargoes were offered by Malaysia's state-run Petronas across September and October, coinciding with the start of its new floating LNG production facility, one trader said.
Cargo numbers could not be immediately confirmed.
Indonesia is also reportedly offering cargoes.
In Nigeria, Royal Dutch Shell Plc (NYSE: RDS.A) declared force majeure on gas supplies to the Nigeria LNG export plant this week, raising the possibility of shipment delays or even cancellations owing to inadequate feedstock.
A source said that up to seven cargoes could be delayed as a result of the force majeure, with some long-term buyers potentially already notified of postponements.
"The plan is to lift the force majeure by the end of the month," the source said.
Elaborating on how Nigeria LNG could apportion cargo postponements, he said: "I think different [offtake] contracts will be treated differently. NLNG will take a view on which cargoes it cancels depending on the underlying prices in each contract."
Indian Oil Corp. is seeking two cargoes for October delivery in a tender valid until Aug. 23, while peer Petronet closed a tender to buy a September cargo on Aug. 12, sources said.
Steady output from the Gorgon plant in Australia, operated by Chevron Corp. (NYSE: CVX), has led project partner Exxon Mobil Corp. (NYSE: XOM) to plan to market more supply via tenders.
Various sources say stakeholders in Gorgon reported production at 70% of capacity. Winter is shaping up to be bearish as supply gets back on track from Gorgon--assuming Angola LNG resumes operations as planned in September, a trade source said.
A full four-week September shutdown also looms for Cheniere Energy's Sabine Pass project in Louisiana--including both the first and second production lines--as Cheniere corrects a design issue with a process flare, market intelligence firm Genscape said, citing comments by Cheniere management.
As short-covering demand by trading firms lessens, supplies are having to fall back on relatively thin end-user demand, helping explain price declines, another trader said.
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